Commons statement on the Private Rented Sector - June 16

The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Eddie Hughes)

Our homes, whether we own them or not, are where we go to sleep and wake up every day. They are where we raise our children and care for our elderly. They ought to be places of safety and security. For many of the 11 million private renters in this country, that most reasonable expectation does not match up to reality. As I speak today, conditions in our private rented sector are simply not good enough. There are countless tenants living in constant fear of eviction, tenants who do not feel able to demand repairs to mould and damp in their homes, and tenants whose health suffers because of the combination of stress and unacceptable conditions. It is simply not good enough. It is not just tenants the system is not working for—it is landlords too.

While our determination to turn generation rent into generation buy is an unwavering one, and the Prime Minister’s commitment last weekend to extend the right to buy will build on that record, we need to help the many people for whom home ownership is out of reach right now. Faced with the escalating cost of living, rent rises and house prices high enough to give the average prospective house buyer vertigo, the need to afford renters additional protections has never been more urgent.

So today we are setting out to overhaul our private rented sector with new proposals. This White Paper, “A fairer private rented sector”, represents the biggest set of reforms to this sector in a generation. They are reforms that will deliver a new deal for the private renters of this country—a deal based on fairness, security and accountability. We have kept the proposals focused and distilled them into 12 points of action in the White Paper. They include measures such as the requirement for all privately rented homes to meet the decent homes standard, designed to drive up quality; a ban on section 21 no-fault evictions, designed to stop people having to live in fear of their lives being turned upside down at a moment’s notice by an unscrupulous landlord; and the ability to limit rent rises to once a year, maximum, while bolstering the enforcement powers of local councils.

I want to be clear that these reforms do not assume that all landlords are the same. The majority of landlords do right by their tenants and offer them a positive living situation, and we want to support that majority. That is why the White Paper also includes measures that will make it easier for landlords to tackle genuine cases of antisocial behaviour or deliberate and persistent non-payment of rent. The relationship must work for both parties.

These are clear-eyed plans that make it clear that we have really thought about the whole of the private rented sector and considered how it has evolved in the past few decades. That is why the reforms cover the whole gamut, from proposals to formally give pet-loving tenants the chance to request their landlord allow them to live with their beloved animals, to more investigative and enforcement powers for councils and a new property portal that will empower tenants and landlords by helping them with clear, useful information on their rights.

It used to be the case that people rented as a stepping stone to owning their own home, but for the 1.3 million households who are renting with children, that is frequently not the case any more. Those people need more protection, and they need policies that provide them with stability. I cannot think of any other part of life where people would hand over hundreds, if not thousands, of pounds a month for a service, and not be able to demand a certain minimum standard of quality and security from the people providing them with that service. These reforms will recognise that new world and continue to build on this Government’s record since 2010. We have already taken significant action to improve private renting, including significantly reducing the proportion of non-decent private rented homes, banning tenancy fees for tenancy agreements signed after 1 June 2019, and introducing pandemic emergency measures to ban bailiff evictions.

This paper has been long awaited by Members from across the House. I recognise and pay tribute to the work of the Public Accounts Committee and hon. Members who have invested extensive time and energy in unpicking this problem and championing renters. I see many of them in the House today.

Taken together, these reforms will be a watershed moment for the private rented sector, but today is not the end of the road. My Department, my right hon. Friend the Levelling Up, Housing and Communities Secretary and I will continue to work closely with stakeholders to deliver these changes on the ground and convert these words into deeds. Taken together, these landmark reforms are going to change the game for the renters of this country. I want to work with Members right across the House to make these plans happen in their areas, to promote the responsible landlords who go above and beyond, and to build the UK’s reputation as an outstanding place to rent as well as to own a home. Whoever you are and wherever you live in the UK, you should have a right to expect a safe and secure home to live in. You should have a right to expect certainty that you will not be turfed out at a moment’s notice. At the most basic level, you should have a right to expect the same peace of mind that owning your home would give. This White Paper delivers on those expectations and more. It sets in motion reforms that will make a fundamental difference to the lives of millions of renters in this country. For that reason, I commend this statement to the House.

12.26pm
Matthew Pennycook (Greenwich and Woolwich) (Lab)

I thank the Minister for advance sight of his statement, although it is deeply regrettable that the Government only published the White Paper that is its subject a little over half an hour ago. If it had been shared earlier, Members might be better placed to question the Minister on precisely what the Government are proposing.

Labour strongly supports reform of the private rented sector and has called for it for many years. Regardless of whether they are a homeowner, leaseholder or tenant, everyone has a basic right to a decent, safe, secure and affordable home. Yet millions of those renting privately live with the knowledge that they could be uprooted at a moment’s notice and with minimal justification. Given the size of the private rented sector and its ongoing—indeed accelerating—expansion, this basic lack of stability and certainty is blighting the lives of growing numbers of families. The cost of living crisis is exacerbating this already harmful situation. In many parts of the country, rents in the private rented sector are surging, and with the Government having decided to once again freeze local housing allowance, millions of hard-pressed tenants are at risk of arrears and eviction.

We welcome the proposals in the White Paper and congratulate all the individuals and organisations that have made the case for change over many years. But why has it taken the Government so long to get here? The commitment to reform the private rental market and ban so called no-fault section 21 evictions was made over three years ago by the Government led by the right hon. Member for Maidenhead (Mrs May). In the time since, over 200,000 private renters—not just the young but growing numbers of older people and families on low incomes forced to rent privately because successive Conservative Governments have overseen the erosion of our social housing stock—will have been turfed out of their homes as a result of the Government’s failure to act with the urgency required.

Three years on, that urgency is still lacking, and instead of the publication of legislation that we can fast-track through this House, the best the Government can do is to bring forward a White Paper. Renters across the country need emergency legislation, not further consultation. We know that it is not a guarantee, given that renters reform was promised in the 2021 Queen’s Speech and not delivered, but we do have a commitment to that legislation in this Session, so can the Minister give the House an indication of when it is likely to be published?

Let me turn to some of the specific proposals in the White Paper. We obviously welcome the proposed ban on no-fault evictions, but we will want assurances that the proposals for strengthened mandatory grounds for possession cannot be abused to unfairly evict tenants and will be tight enough to minimise fraudulent use of the kind we have seen in Scotland. Can the Minister provide any such assurances? We support the introduction of minimum standards in the private rented sector through the extension of the decent homes standard, but we have real concerns about how this might be enforced in practice given that it is not an enforceable standard in the social rented sector, where it already exists. What steps do the Government intend to take to ensure that the standard can be properly enforced and that private renters do not end up bearing the cost of seeking redress?

Lastly, in none of the coverage this morning or in the White Paper itself is there any sign of meaningful proposals to address the problem of unreasonable rent rises. A one-year rent increase limit, the removal of rent review clauses and vague assurances about giving tenants the confidence to challenge unjustified increases at tribunal are simply not good enough. According to Rightmove, private rents are rising at record rates, with average asking rents outside London rising last year by over 10% for the first time. With the scrapping of section 21, the risk of economic evictions via rent hikes is going to increase markedly. Can the Minister tell us why the Government are unwilling to act to properly protect private tenants from extortionate rent hikes?

We will study the White Paper carefully now it is published and we will engage constructively with its proposals, but we will also do whatever we can to ensure they are not watered down come the legislation. We are going to continue to urge the Government to bring that legislation forward as a matter of urgency, because renters have waited long enough for the protections that they deserve and rightly expect.

Eddie Hughes

I guess I should begin with an apology, saying I am sorry that the document was available at such short notice, although there is going to be considerable opportunity over the next couple of months for me and Members right across the House to discuss its content. I look forward to doing that either in formal settings or in the Tea Room with Members from all parties, right across the House.

But I am not going to let the hon. Gentleman rain on my parade on a sunny day like this. He is looking very serious, but I know that, deep down, Opposition Members welcome this legislation. They may be disappointed that it has taken a while to get to this point, but they may remember—it feels like a distant memory now—that we have had two years of a global pandemic in the meantime. The Government have done everything they could to support renters during that period. We have given furlough payments that have allowed renters to continue to occupy their properties and keep arrears as a result of the pandemic to a limit. We have also invested heavily in things such as discretionary housing payments to help people where arrears have been built up. So we have been doing an awful lot of work in the past two years and I think he should acknowledge that.

As I say, this is a White Paper; it is not the legislation. We have the opportunity now to discuss, as Members of Parliament and with stakeholders, what they think about the legislation and perhaps see if there is an opportunity to improve and enhance it, provided they are reasonable with their suggestions, before we get to the legislation.

On when that might happen, hon. Members will appreciate that our Department has an intense legislative programme. We have the Levelling-up and Regeneration Bill and the Social Housing (Regulation) Bill. As you will be aware, Madam Deputy Speaker, the Social Housing (Regulation) Bill has already life in the other place, so progress is being made with our legislation. However, clauses have been sent for drafting and work is already under way. People are beavering away on the construction of that document, so I hope we will see it in quick time. Once it gets to Parliament, I am expecting its passage through Parliament to be pretty smooth and fast because I think it is going to be welcomed by Opposition Members.

On the point about the abuse of mandatory grounds that we are strengthening for landlords, I understand completely the reservations of the hon. Gentleman. I commit to work closely with him to make sure that that legislation is tough and there is not the opportunity for rogue landlords to thwart it in some way, given our best intentions.

On how we might enforce the powers, I fully appreciate that councils are under intense pressure, so we are going to work with councils on a number of pilot schemes so we can test what the best way is for them to enforce good-quality housing within the private rented sector, and then we can develop best practice and I hope share that across the country.

On rent rises, one of the things we should appreciate with regard to the cost of living is that, if somebody is forced to move tenancy, perhaps because of a no-fault section 21 eviction, on average, that costs approximately £1,400. So if we can limit the number of times people move, we are going to make sure that they do not experience those unfortunate and unnecessary costs. However, as a Government, we are clearly not committed to the idea of rent control. We have seen that experiment carried out recently in some places in Europe and all it does is stop investment in properties. That is the last thing we want to do.

This White Paper commits to a fairer private rented sector for both tenants and landlords, and I look forward to working with Opposition Members to deliver it.

Sir Desmond Swayne (New Forest West) (Con)

Madam Deputy Speaker, can I refer you to my entry in the Register of Members’ Financial Interests?

Rents are rising because of a shortage of properties in the market as landlords flee from it. Has the Minister considered that these measures may have the very reverse effect of that which he intends?

Eddie Hughes

I always love to hear from my right hon. Friend. His powerful oratory suggests some things sometimes that may not necessarily be quite the case. The English housing survey tells us that as many landlords are talking about selling some of their stock as are talking about buying new stock, so I think the equilibrium within the market is likely to be marginally less dramatic than he has suggested. Clearly, as a Government, we will be keeping a watchful eye on these things to make sure there are no unintended consequences. Given the work we have put in to reassure landlords and the consultation we have had during the creation of this White Paper, I think he may find that they are less frightened of the White Paper than his oration might suggest.

Ms Karen Buck (Westminster North) (Lab)

While also welcoming the content of the White Paper as outlined now, I share the concerns of my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) about the further delay before legislation—the consultation and pilots—when there is pressing urgency. The Minister does not need to wait to get on with an urgent review of enforcement capacity. Whether it is about substandard accommodation or illegal evictions, we know we have a problem of capacity in local government, housing legal aid and the police supporting people facing illegal evictions. Can he undertake to review that capacity urgently and take steps to deal with it while we wait for the legislation?

Eddie Hughes

As I say, given the other challenges within the Department, I am not sure what our capacity is for that. However, I will commit to meeting the hon. Lady to discuss her suggestions in more detail in very quick time to make sure that I fully understand what she is proposing and see what the capacity might be for that.

Scott Benton (Blackpool South) (Con)

Blackpool has some of the worst private sector housing stock in the entire country, so I welcome the £1 million housing enforcement pilot, which alongside the measures outlined today will make a real impact. May I thank the Minister for working so closely with Blackpool Council so far to devise the pilot, and will he meet me to discuss the £30 million package that his Department is working on for housing-led regeneration within Blackpool?

Eddie Hughes

My hon. Friend is an incredible champion for good housing standards in his constituency. Our Department has carried out a deep dive of housing conditions in Blackpool, where we have some of the worst housing conditions. With our commitment as a Department and as a Government to levelling up across the country and ensuring that across the UK we are delivering high-quality housing, I look forward to working with him further and meeting him to discuss his proposals.

Wera Hobhouse (Bath) (LD)

I also refer to my entry in the Register of Members’ Financial Interests.

I welcome the reforms that are being proposed today. However, a lot more needs to be done to protect renters. Homelessness is about to soar, due to the cost of living crisis, and LGBT+ people are disproportionately affected by homelessness and at heightened risk of violence, abuse and exploitation. Apart from the reforms announced today, what are the Government actually doing to protect especially the LGBT+ community from homelessness?

Eddie Hughes

The hon. Lady raises an incredibly important point. Obviously, the Government are committed to spending £2 billion on tackling homelessness and rough sleeping in the next three years, but I completely accept the point she makes about the LGBT community. We work very closely with charities in that sector to ensure that we understand the challenges they face, and they certainly inform our policy formation to make sure we are offering the support we can.

Andy Slaughter (Hammersmith) (Lab)

It would be good to see some security restored to the private rented sector, 35 years after a Conservative Government introduced no-fault eviction, but housing in the UK also has a crisis of affordability and disrepair. The social housing sector, although far from perfect, is better placed to tackle all these issues, but it has been weakened in favour of the private rented sector over many years. What plans does the Minister have to rebalance the housing market and restore social housing to its previous role as the leading provider of decent homes?

Eddie Hughes

The hon. Gentleman refers to the fact that a Conservative Government introduced the legislation 35 years ago. Perhaps he has forgotten that, just occasionally, the public vote for a Labour Government, so they have had the opportunity to repeal it during their time in power. I know it does not happen very often, but when they occasionally get the levers of power, they could pull them. However, the hon. Gentleman will also be aware that we have introduced the Social Housing (Regulation) Bill to the other place. That is going to make its way through Parliament and make significant changes to how the social housing sector is managed and regulated. Our intention is to drive up standards across the social and private rented sectors. Our ambition is to reduce by 50% the number of non-decent homes by 2030, across all tenures.

Rachael Maskell (York Central) (Lab/Co-op)

Nearly a quarter of my constituents live in the private rented sector and they simply cannot afford to do so. They do not want to be in the private rented sector, but there is not enough social stock and buying is too expensive. Therefore, they are trapped. Now not only are they seeing section 21 evictions, but, with rental costs the highest in the north, at £945 per month on average, people are having to leave the area, which impacts on the economy as well as on their lives. Will the Minister reconsider the issue of rent controls because the pace that rents are rising is forcing people out of my city?

Eddie Hughes

I have to be blunt and say, “Under no circumstances”—that is simply not a Conservative policy and it is not something we are going to pursue. The White Paper contains some things that will be helpful to the hon. Lady’s constituents, such as abolishing rent review clauses. Abolishing section 21 means that people should not have to move property so frequently and will save money that way. The No. 1 thing I would say, however—I keep apologising for being such a cheerleader for my boss—is that, since the Secretary of State took his post in September, he has been championing the idea that the Government should build more social housing and more properties for social rent. That is an invaluable contribution that will help her constituents.

Ruth Cadbury (Brentford and Isleworth) (Lab)

I, too, draw the House’s attention to my entry in the Register of Members’ Financial Interests. Like other Members, I endorse the direction in which the Government are going, but there are a lot of gaps that they could have addressed in the White Paper, only the summaries of which I have had time to see so far. Does the Minister agree that a key element of giving greater security, transparency and power to tenants is to ensure that letting agencies which act on behalf of landlords work to the highest standards as well? Could he commit to looking at a code of conduct for letting agents, as has been done in Wales?

Eddie Hughes

We have approximately 19,000 letting agents in this country and they need to belong to one of two landlord redress schemes. My understanding is that that is working quite effectively, but I am happy to meet and discuss any proposals that the hon. Lady might have. She is well informed in this area. I often see her in the Chamber discussing all things housing, so I value her contribution.

Madam Deputy Speaker (Dame Rosie Winterton)

I thank the Minister for his statement.